Star appeal fading: Can Indian markets retain their investment edge?
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Subscribe to enjoy similar stories. A perfect storm of domestic and global challenges is battering India's financial markets. The rupee’s freefall, dismal corporate earnings, spiking bond yields, and a relentless foreign portfolio investors (FPI) exodus have struck India harder than its Asian counterparts.
Global trade tensions, fuelled by President Donald Trump’s aggressive “America First" stance, have only added to the turmoil. Once a shining star among emerging markets, India’s equity performance has faltered, trailing its regional peers. As uncertainty looms over global economies and policy landscapes shift, analysts are now debating whether India can retain its edge or whether its investment appeal will continue to erode.
The path ahead looks increasingly precarious. Can India navigate these headwinds, or is more pain on the horizon? A significant over 21% correction has hit India's $3.95 trillion stock market since September 2024, jeopardizing its position as the world's fifth largest. Unlike the majority of the top ten markets, which either saw growth or remained relatively stable over these five months, India's decline, alongside Japan, France, and the UK, raises concerns, leaving investors bracing for a potential dethroning by the UK or Canada, currently at sixth and seventh spot in terms of valuation.
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